Business performance <> Revenue and profits set record highs for the sixth consecutive year. Revenue: 390.7 billion (+28.3% YOY) Operating income: 46.0 billion (+27.5% YOY) Profit attributable to owners of parent : 31.8 billion (+28.3% YOY) Single-family homes related business: Single-family homes in urban centers established price advantages over new condominiums, which are selling at high prices. Condominiums business: Market appeal of compact condominiums located in urban centers was clear. Property resales business: The impact of tightening loan standards for real estate investment was limited for business corporations and wealthy class of customers. U.S. Real Estate business: Demand to purchase U.S. properties remained high among wealthy class of customers. Our goal is to achieve record highs both in revenue and income for the seventh consecutive year. Revenue: Ordinary income: Profit attributable to owners of parent : 510.0 billion (+30.5% YOY) 51.5 billion (+11.8% YOY) 37.0 billion (+16.3% YOY) Updated the mid-term management goals for the fiscal year ending September 30, 2020 <From To FY2020> Revenue: 590.0 billion (Compared to FY2019: +15.7%YOY, Compared to : 51.0%) Ordinary income: 61.0 billion (Compared to FY2019: +18.4%YOY, Compared to : 32.5%) Profit attributable to owners of parent: 42.5 billion (Compared to FY 2019: +14.9%YOY, Compared to : 33.6%)
Topics ([Updated] Mid-Term Business Plan Hop Step 5000) Revenue, profits, and dividends for grew 4.0 times, 5.7 times, and 7.8 times, respectively, five years after going public. The Company is finally set to grow into one with revenue of 500 billion yen for FY2019. Revenue ( billion) 600 Total revenue Others Property resales Condominums 510.0 590.0 Profits ( billion) 80 Single-family homes related 400 Ordinary Income Profit attributable to owners of parent 390.7 51.5 61.0 60 304.6 200 179.3 247.2 37.0 42.5 40 96.9 112.1 20 0 FY2013 FY2014 FY2015 FY2016 FY2019Plan FY2020 Plan Single-family homes related: Includes the Company s brokerage business and the single-family homes business, construction contracts business, and adjustments. operated by Open House Development Co., Ltd., Open House Architect Co., Ltd., and Hawk One Corporation. 2013.9-2017.9 Revenue CAGR:33.1% 2017.9-2020.9 Revenue CAGR:24.6%
Revenue and profits set record highs for the sixth consecutive year. Revenue and profits in all stages achieved more than 25% growth. <2016/10-2017/9> <2017/10-2018/9> (Million yen) <2017/10-2018/9> Actual % of revenue Actual % of revenue Inc.(Dec.) Initial Forecast as of 17.11.14 Difference from forecast Revenue 304,651-390,735-28.3% 380,000 10,735 Operating income 37,617 12.3% 47,304 12.1% 25.8% 44,700 2,604 Ordinary income 36,131 11.9% 46,052 11.8% 27.5% 43,500 2,552 Profit attributable to owners of parent 24,797 8.1% 31,806 8.1% 28.3% 30,000 1,806
We continued to record high growth while maintaining a business portfolio based mainly on actual demand. A rapid growth in the U.S. real estate business, for which full-fledged sales activities were launched from, contributed to the growth of the overall business performance. <2016/10-2017/9> <2017/10-2018/9> Actual Ratio Actual Ratio (Million yen) Inc.(Dec.) Revenue 304,651 100.0% 390,735 100.0% 28.3% Single-family homes related business * 1 187,949 61.7% 218,540 55.9% 16.3% Condominiums 26,480 8.7% 49,385 12.6% 86.5% Property resales 88,976 29.2% 107,430 27.5% 20.7% Others (including U.S. real estate business) 1,825 0.6% 15,409 3.9% 744.2% Adjustments (580) - (31) - - Actual % of revenue Actual % of revenue Inc.(Dec.) Operating Income 37,617 12.3% 47,304 12.1% 25.8% Single-family homes related business 23,095 12.3% 26,276 12.0% 13.8% * 1 Condominiums 4,345 16.4% 7,306 14.6% 66.4% Property resales 11,122 12.5% 12,272 11.4% 10.3% Others (including U.S. real estate business) 54 3.0% 2,408 15.6% 2,354 Adjustments (1,000) - (883) - - * 1 To further strengthen the business model a comprehensive system from purchase and construction to intermediary and sales, the brokerage business, single-family homes business, and Open House Architect were consolidated into the single-family homes related business in
Single-family homes in urban centers established price advantages over new condominiums, which are selling at high prices. Sales remained strong and the number of brokerage transactions showed a high growth rate of 25.1% year on year for the full fiscal year. Revenue ( billion) Operating income ( billion) 80 Changes in the average price for new condominiums in Tokyo s 23 wards and average price for our single-family homes (built-for-sale) (Million yen) 218.5 26.2 70 60 Average price for new condominiums in Tokyo s 23 wards 53.39 67.32 66.29 70.89 69.53 187.9 FY2108 23.0 FY2108 50 40 30 45.41 43.32 44.77 Average price for our single-family homes (built-for-sale) 44.35 43.48 2011 2012 2013 2014 2015 2016 2017 2018 Source: MLIT, Monthly marketing report of lands Fiscal years: Condominium prices are on a calendar-year basis. Prices for our homes are for the period October September. Condominium prices for 2018 are for the January September period. Prices of our homes are for the October 2017- September 2018 period. 16/10-17/9 17/10-18/9 Inc.(Dec.) Revenue ( million) 187,949 218,540 16.3% Gross profit( million) 34,257 39,338 14.8% Gross profit margin 18.2% 18.0% (0.2)pt Number brokered in each quarter 38.8% 39.7% Full year: 25.1%up 27.5% 20.0% 16.8% 17.6% 29.8% 25.8% 26.7% 25.2% 6.7% 26.3% Operating income ( million) 23,095 26,276 13.8% Operating income margin 12.3% 12.0% (0.3)pt 590 606 708 733 742 841 989 929 963 1,053 1249 1115 The above figures in the second quarter of were restated on a new segment basis, in conjunction with the change in the reporting segment effective. 1Q FY16 2Q 3Q 4Q 1Q FY17 2Q 3Q 4Q 1Q FY18 2Q 3Q 4Q
The single-family homes business based on actual demand steadily drove up business performance. The business continued to record year on year growth of more than 20% and the number of houses delivered exceeded 3,800 units. Revenue ( billion) 185.4 151.9 119.5 Gross profit ( billion) 33.5 27.8 21.2 Gross profit margin (%) 17.8 18.3 18.1 Number delivered 3,881 3,155 2,340 By type of sale Built-for-sale houses Lands Built-to-order houses FY2016 Inc. (Dec.) 15/10-16/9 16/10-17/9 17/10-18/9 Revenue ( million) 55,655 65,912 70,222 6.5% Number delivered 1,243 1,489 1,627 138 Unit Price 44.8 44.3 43.2 (1.1) Revenue ( million) 52,141 72,556 97,799 34.8% Number delivered 1,097 1,666 2,254 588 Unit Price 47.5 43.6 43.4 (0.2) Revenue ( million) 11,547 12,909 16,805 30.2% Number delivered 747 884 1,182 298 Unit Price 15.5 14.6 14.2 (0.4) Others Revenue ( million) 218 620 577 (6.9)% Revenue ( million) 119,563 151,998 185,411 22.0% Total Gross profit ( million) 21,232 27,873 33,586 20.5% Gross profit margin 17.8% 18.3% 18.1% (0.2)pt Number delivered (built-for-sale houses + lands) 2,340 3,155 3,881 726
The number of construction contracts for OHD increased, which contributed to the Group s single-family homes construction capacity. Gross profit margin declined as expected, due to an increase in the number of houses delivered under OHD contracts that do not incur operating expenses. Revenue ( billion) Number delivered to OHD Number delivered Composition ratio of OHD contracts 37.6 39.5 42.1 474 609 1,077 2,484 2,741 3,224 19.1% 22.2% 33.4% FY2016 15/10-16/9 16/10-17/9 17/10-18/9 Inc.(Dec.) Number of all Company contracts Number of OHD contracts included left Revenue ( million) 37,625 39,154 42,130 7.6% Gross profit ( million) 5,368 5,150 4,687 (9.0)% Gross profit margin 14.3% 13.2% 11.1% (2.0)pt Number delivered *1 2,484 474 2,741 609 3,224 1,077 483 468 2,667 3,172 3,640 14.8% up 479 810 1,214 49.9% up *1 Number delivered refers to the number of properties delivered under single-family homes construction contracts to corporations. Number delivered to OHD on the lower line The above represents the number of contracts for construction orders received during the respective fiscal year.
Sales were strong for compact condominiums, targeting single- and two-person households whose occupants prefer living close to work. Two condominium properties which were completed ahead of schedule were included in the actual performance in the previous fiscal year, earlier than initially planned. Revenue ( billion) Gross profit ( billion) Operating income ( billion ) Number delivered 49.3 10.7 7.2 802 19.0 26.4 4.7 6.6 3.0 4.3 304 487 FY2016 15/10-16/9 16/10-17/9 17/10-18/9 Inc. (Dec.) Major condominiums delivered in Revenue ( million) 19,059 26,480 49,385 86.5% Gross profit ( million) 4,783 6,643 10,732 61.5% Gross profit margin 25.1% 25.1% 21.7% (3.4)pt Operating income ( million) 3,085 4,345 7,230 66.4% Operating income margin 16.2% 16.4% 14.6% (1.8)pt Number delivered 304 487 802 315 Unit price( million) 62.7 54.4 61.5 7.1 Name Units Average price Open Residencia Azabu Roppongi 34 70million Open Residencia Kagurazaka West Terrace 30 70million Open Residencia Ochanomizu 21 60million Open Residencia Hongo 3chome 22 50million
The main customers of the property resales business are business corporations and the wealthy class of customers, and the impact of tightening loan standards for real estate investment is limited. Profits grew more than 10% year on year and operating income exceeded 10 billion yen for the third consecutive year. Revenue ( billion) Gross profit ( billion) Operating income ( billion) Number delivered 72.8 88.9 107.4 13.7 14.6 16.6 10.5 11.1 12.2 183 209 289 FY2016 15/10-16/9 16/10-17/9 17/10-18/9 Inc. (Dec.) Revenue ( million) 72,801 88,976 107,430 20.7% Gross profit ( million) 13,725 14,660 16,633 13.5% Gross profit margin 18.9% 16.5% 15.5% (1.0)pt Operating income ( million) 10,583 11,122 12,272 10.3% Operating income margin 14.5% 12.5% 11.4% (1.1)pt Number delivered 183 209 289 80 Unit Price( million) 398 426 372 (54) Breakdown of properties owned (as of the end of September 2018) By property size* 100 MIL > 100 MIL 500 MIL > 500 MIL 101 18 By use 18 22 14 40 33 N=141 N=141 83 N=141 Condminium Office building Complex building *Based on book values at the end of September 2018. By location 25 69 Tokyo Kanagawa Kansai and Chubu area Other
(U.S. Real Estate Business Demand for purchasing U.S. properties is strong among the wealthy class of customers. Without competitors who provide a one-stop service, the business performance of the U.S. real estate business improved rapidly. Revenue ( billion) Gross profit ( billion) Operating income ( billion) Number delivered 15.4 394 3.5 2.4 0.4 1.8 0.3 0.6 0.1 0.05 FY2016 15/10-16/9 16/10-17/9 17/10-18/9 Inc. (Dec.) Revenue ( million) 455 1,825 15,409 744.2% Gross profit ( million) 351 600 3,530 488.0% Gross profit margin 77.3% 32.9% 22.9% (10)Pt Operating income ( million) 138 54 2,408 2,354 Our service for the administration of local properties and support for sales. Business model-one-stop Service Administration of properties Selection of properties Offering of properties that our local offices selected Funding Operating income margin 30.5% 3.0% 15.6% 12.6pt Number delivered - - 394 - Support for the whole process from conclusion of an agreement to the end of a transaction Purchase process Introduction of financial institutions, and loans from our Group company are also available.
(Million yen) 2016/10-2017/9 Actual % of revenue 2017/10-2018/9 Inc. (Dec.) % of Actual revenue 2016/10-2017/9 Actual % of revenue 2017/10-2018/9 Inc. (Dec.) % of Actual revenue SG&A expenses 18,501 6.1% 5.9% 4,445 Non-operating income 444 0.1% 0.1% (180) Personnel expenses 4,954 1.6% 1.5% 945 Sales commissions 2,434 0.8% 0.8% 735 Office expenses 2,417 0.8% 0.7% 348 Advertising expenses 1,771 0.6% 0.5% 97 Foreign exchange gain 256 0.1% (256) Others 188 0.1% 0.1% 75 Non-operating expenses 1,929 0.6% 0.4% (413) Interest expenses 892 0.3% 0.3% 254 Commission fee 682 0.2% 0.0% (605) Promotion expenses 803 0.3% 0.3% 467 Foreign exchange loss 0.0% 86 Others 6,120 2.0% 2.0% 1,850 Other 354 0.1% 0.1% (149)
(Million yen) Sep 30, 2017 Sep 30, 2018 Inc. (Dec.) Current assets 248,429 379,744 131,314 Cash and deposits 90,910 119,053 28,143 Inventories 144,894 233,272 88,377 Others 12,625 27,418 14,793 Non-current assets 8,255 13,852 5,596 Property, plant and equipment 3,113 5,474 2,361 Intangible assets 1,299 3,515 2,215 Investments and other assets 3,841 4,861 1,019 Deferred assets 51 40 (10) Total assets 256,736 393,637 136,900 48,190 Sep 30, 2017 Sep 30, 2018 Inc. (Dec.) Liabilities 173,357 106,793 Current liabilities 82,613 100,054 Non-current liabilities 90,743 6,738 Of which figures for Hawk One: 59,077 Net Assets 83,379 30,107 Shareholders equity 82,902 22,895 Valuation and translation adjustments Total liabilities and net assets 407 7,211 256,736 136,900 Of which figures for Hawk One: 36,021 <Safety index> Net debt / equity ratio* (times) Sep 30, 2017 Sep 30, 2018 Inc. (Dec.) 0.6 0.3 * Net debt/equity ratio: (loans payable + corporate bonds cash & deposits) / net assets, Sep 30, 2017 Sep 30, 2018 Inc. (Dec.) Equity ratio 32.3% (5.3)% (For reference) Figures that reflect the share exchange executed on October 1, 2018 Equity ratio (3.5)%
(Million yen) End of FY2015 (Sep 30, 2015) End of FY2016 (Sep 30, 2016) End of (Sep 30, 2017) End of (Sep 30, 2018) (Ratio) Inc. (Dec.) Of which figures for Hawk One: 46,077 Single family homes related 54,497 57,633 61,667 137,991 59.2% 76,323 Condominiums 13,101 20,422 40,291 43,322 18.6% 3,031 Property resales 34,586 38,838 38,871 42,873 18.4% 4,002 Others 428 651 4,064 9,084 3.9% 5,019 Total 102,614 117,546 144,894 233,272 100.0% 88,377 233.2 102.6 117.5 121.2 125.3 137.9 144.8 160.2 178.1 196.0 (Billion yen) FY15 4Q FY16 4Q FY17 1Q FY17 2Q FY17 3Q FY17 4Q FY18 1Q FY18 2Q FY18 3Q FY18 4Q Single family homes related 54.4 57.6 54.4 55.7 60.4 61.6 74.9 78.9 93.7 137.9 Condominiums 13.1 20.4 28.4 33.7 39.4 40.2 41.8 46.2 48.9 43.3 Property resales 34.5 38.8 37.4 34.8 37.1 38.8 37.6 46.1 45.4 42.8 Others 0.4 0.6 0.8 0.9 0.9 4.0 5.8 6.8 7.8 9.0
<2016/10-2017/9> <2017/10-2018/9> Major factors (Million yen) Cash flows from operating activities (799) (10,017) - Booking of income before income taxes - Increase in inventories - Payment of income taxes - Increase in operating loans, etc. Cash flows from investing activities (1,337) (12,582) - Acquisition of shares of Hawk One, etc. Cash flows from financing activities 25,181 50,696 - Increase in loans payable - Dividend payment, etc. Effect of exchange rate changes on cash and cash equivalents Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period 356 (27) 23,401 28,068 67,508 90,910 90,910 118,978
The Company aims to achieve record highs in revenue and income for seven consecutive fiscal years. The Company aims to become one with revenue of 500 billion yen with a business portfolio based mainly on actual demand. (Million yen) (2016/10-2017/9) (2017/10-2018/9) FY2019 (2018/10-2019/9) Actual Actual Inc. (Dec.) Forecast Inc. (Dec.) Revenue 304,651 390,735 28.3% 510,000 30.5% Operating income 37,617 47,304 25.8% 54,000 14.2% Ordinary income 36,131 46,052 27.5% 51,500 11.8% Profit attributable to owners of parent 24,797 31,806 28.3% 37,000 16.3% EPS (yen) 443.41 570.17 653.30 Annual dividends per share (yen) 65.00 98.00 33.00 121.00 23.00 Payout ratio 14.7% 17.2% 18.5%
With the addition of Hawk One, more than 7,000 single-family homes will be delivered by the Group as a whole. The forecast incorporates further growth in the U.S. real estate business. (Million yen) (2016/10-2017/9) (2017/10-2018/9) FY2019 (2018/10-2019/9) Actual Actual Inc. (Dec.) Forecast Inc. (Dec.) Revenue 304,651 390,735 28.3% 510,000 30.5% Single-family homes related business* 187,949 218,540 16.3% 340,000 55.6% Condominiums 26,480 49,385 86.5% 57,000 15.4% Property resales 88,976 107,430 20.7% 87,000 (19.0)% Others (including U.S. real estate business) 1,825 15,409 744.2% 26,000 68.7% Adjustments (580) (31) 0 To further strengthen the business model a comprehensive system from purchase and construction to intermediary and sales the brokerage business, single-family homes business, and Open House Architect will be consolidated to establish a new segment, the single-family homes related business. Hawk One will be consolidated from FY 2019 as a new subsidiary.
: We opened seven sales centers (Urawa, Tsurumi, Urawachuo, Motosumiyoshi, Gokiso, Shinkoiwa, Shin-Kawasaki) For the period of October November 2018: We opened four sales centers (Musashiurawa, Kawaguchi, Kanayama, Noborito), a total of 36 sales centers are in operation. No. of brokerage transactions and YOY% < Tokyo region> 3,501 25.1% 4,380 25.1% 5,480 FY2019 plan No. of sales centers of each area FY2016 15/10-16/9 16/10-17/9 17/10-18/9 As of 2018.11.14 Tokyo 13 16 17 17 Kanagawa Prefecture Aichi Prefecture 5 7 10 11 2 3 4 Aichi Tokyo Saitama Prefecture 2 4 Total 18 25 32 36 <Nagoya region> Sakae Motoyama Gokiso Kanayama
2. OHD) In urban centers, the number of households is expected to continue increasing, and demand to purchase homes is projected to increase. We will endeavor to boost our market share also in new operating areas by adopting the dominant strategy. 151.9 Trends in revenue and YOY% ( billion) 22.0% 185.4 22.4% 227.0 FY2019 plan 130 125 120 115 110 105 100 95 Estimated no. of households in the Company s operating areas (shown in indicators) Nationwide Tokyo 23 ward Yokohama Kawasaki Nagoya Saitama Fukuoka 2010 2015 2020 2025 2030 2035 2040 Sources: Numbers of households by city were projected with reference to Household Projection for Japan (National Projection) and Population Projection for Japan by Prefectures for 2018 projection, published by the National Institute of Population and Social Security Research, and were converted to indicators with actual results of 2010 set at 100. 128 121 120 119 109 107 98 By type of sale Built-for-sale houses Number delivered by type of sale Actual Actual FY2019 plan Inc (Dec) 1,489 1,627 2,200 573 Lands 1,666 2,254 2,800 546 Built-toorder houses Built-for-sale houses +lands 884 1,182 1,400 218 3,155 3,881 5,000 1,119 80 70 60 50 40 30 Changes in the average price for new condominiums in Tokyo s 23 wards and average price for our single-family homes (built-for-sale) Average price for new condominiums in Tokyo s 23 wards 53.39 45.41 67.32 43.32 66.29 44.77 Average price for our single-family homes (built-for-sale) 44.35 (Million yen) 70.89 69.53 43.48 2011 2012 2013 2014 2015 2016 2017 2018 Source: MLIT, Monthly marketing report of lands Fiscal years: Condominium prices are on a calendar-year basis. Prices for our homes are for the period October September. Condominium prices for 2018 are for the January September period. Prices of our homes are for the October 2017- September 2018 period.
Construction work : We aim to increase the number of houses delivered under construction contracts for both external customers and the Group companies. We will work to increase the ratio of OHD contracts year by year to contribute to the expansion of the Group s total revenue. Trends in revenue and YOY% ( billion) Nagoya Show Room of Open House Architect Location: Tokugawa, Higashi-ku, Nagoya City (Nagoya Sales Center) 7.6% 9.2% 39.2 42.1 46.0 FY2019 plan Number delivered *1 Ratio of number delivered to OHD Actual Actual FY2019 plan Inc (Dec) 37.1% Total contracts (1) 2,741 3,224 3,500 276 22.2% 33.4% OHD contracts included above 609 1,077 1,300 223 *1 Number delivered refers to the number of properties delivered under single-family homes construction contracts. FY2109 plan
The Company converted Hawk One Corporation into a wholly-owned subsidiary on October 1, 2018. Hawk One is expected to contribute to the growth of the single-family homes related business as a company operating in one of the sub-segments Trends in revenue ( billion) Outline of share acquisition and share exchange Acquisition cost: Approx. 27.3 billion yen (shareholding ratio acquired: 100%) (Cash of approx. 20 bn yen + Simplified share exchange worth 7.3 bn yen) Entirely financed by loan. 63.9 65.3 78.0 Events: July 31: Shares acquired. Share exchange agreement concluded. * ** FY2019 plan * Figures for and are reference values before consolidation into the Group. ** Figures for are based on 11 months results (from Nov. 2017 to Sep. 2018). October 1: Conversion into a wholly-owned subsidiary (date of share exchange becoming effective) Goodwill: Balance as of September 30, 2018 is 2,304 million yen. Amortized on a straight-line basis over a 10-year period Number delivered Actual Actual FY2019 plan Inc (Dec) Built-for-sale houses + Built-to-order houses 1,707 1,734 2,100 -
The conversion to a subsidiary will bring significant advantages to both the Company and HAWK ONE. The Company has operation bases centered on urban areas, while HAWK ONE has those centered on quasiurban areas, and they can complement each other. Purposes 1. Expanding share in the Tokyo metropolitan district and the Nagoya region Companies can complement each other in regard to areas and price ranges. HAWK ONE: Quasi-urban areas; average price: 38 million OHD: Urban areas; average price: 44 million OPEN HOUSE 36 HAWK ONE 27 Tokyo metropolitan district Sales Centers Saitama 2. Strengthening construction performance by leveraging advantage of scale Group-wide supply of single-family homes would amount to 7,900 homes per year. HAWK ONE: 2,100 homes OHD,OHA: 5,800 homes 3. Improving management efficiency by leveraging the brokerage function Sales of HAWK ONE properties through the Company s brokerage HAWK ONE: Sales of homes through local brokers OPEN HOUSE: Proactive sales of Hawk One properties Western Tokyo Kawasaki Yokohama Tokyo s 23 wards Nagoya region Chiba
Demand will remain strong for condominiums in convenient locations with ease of access. In FY2019, condominium in Nagoya will be completed and delivery will start in earnest. 38.9% 26.4 Trends in revenue and YOY% ( billion) 86.5% 49.3 15.4% 57.0 FY2019 plan 40% 30% 20% 10% Trend of seven leading companies market share of condominiums business in the metropolitan areas * 19.8% 24.7% 42.0% 44.3% 2002 2004 2006 2008 2010 2012 2014 2016 46.3% Source: Market share based on the number of condominiums sold in the metropolitan area listed in Trend of Condominiums Market published by Real Estate Economic Institute Co., Ltd. * Seven leading companies: Sumitomo Realty & Development Co., Ltd., Daikyo Incorporated, Tokyu Land Corporation, Tokyo Tatemono Co., Ltd., Nomura Real Estate Holdings, Inc., Mitsui Fudosan Co., Ltd., Mitsubishi Estate Co., Ltd. Number delivered Number delivered Actual Actual FY2019 plan Inc(Dec) 487 802 900 98 Scheduled to be delivered in the fiscal year ending September 2019 Name Units Average price Open Residencia Daikanyama The House 22 90million (Breakdown) Tokyo 682 Nagoya 218 Open Residencia Yoyogiuehara Hills 24 80million Open Residencia Aoi 32 40million Open Residencia Sakura-dori Toyomae-cho 22 30million
Demand for purchasing properties for resale is high on the back of continued BOJ's monetary easing policies. In FY2019, condominium in Nagoya will be completed and delivery will start in earnest. 22.2% 88.9 Trends in revenue and YOY% ( billion) 20.7% 107.4 (19.0)% 87.0 FY2019 plan 7.0 6.0 5.0 4.0 3.0 Earnings yields (%) of property resale deals Nihonbashi Nishi-Shinjuku One-room/Jonan Roppongi Ikebukuro Family/Jonan 10 4 10 4 10 4 10 4 10 4 10 4 10 4 10 4 10 4 10 4 10 4 10 4 10 4 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Source: Japan Real Estate Institute The Japanese Real Estate Investor Survey 4.2 3.9 3.7 3.6 Breakdown of gain on sales and rental earnings ( billion) Actual Act ual FY2019 plan Inc. (Dec.) Total Property resales 88.9 107.4 87.0 (20.4) Gain on sale 86.8 105.0 84.6 (20.4) + Rental earnings 2.1 2.4 2.4 0.0 Breakdown of properties owned (as of the end of September 2018) By property size* 100 MIL > 100 MIL 500 MIL > 500 MIL 101 18 By use 18 22 14 40 33 N=141 N=141 83 N=141 Condminium Office building Complex building *Based on book values at the end of September 2018. By location 25 69 Tokyo Kanagawa Kansai and Chubu area Other
Demand for purchasing properties for resale is high on the back of continued BOJ's monetary easing policies. Projections are conservative although the impact of financial institutions tightening of loan standards for real estate investment will be limited. Trends in revenue and YOY% ( billion) 68.7% Expansion of service areas Columbus, Ohio 260 Hawaii Dallas, Texas 154 FY2019 plan Atlanta. Geogia Example of portfolio property Number of sales Actual FY2019 plan Inc(Dec) Number delivered 394 700 306 Average price Approx. 33 million yen Location: Texas, U.S. Price: 40 million (US$365,000) (assumed exchange rate of 110 to the dollar) Construction period: 1986 Total floor area: 234 m2 (2,524sqft) Site area: 650 m2 (7,003sqft)
The business scale in the Nagoya Region has expanded rapidly since the establishment of Sakae Sales Center in October 2016. In FY2019, condominiums will be completed and delivery will start. Trends in revenue and YOY% ( billion) Kanayama Sales Center 29.0 44.8% 42.0 FY2019 plan Started sales of the sixth condominium in the Nagoya Region Address: Kanayama, Naka-ku, Nagoya Access: 2-minute walk from Kanayama Station on the Meijo Line (subways). Open Residencia Sakura-dori Toyomae-cho Number of sales Actual FY2019 plan Inc(Dec) Single-family homes Built-for-sale houses & Lands 317 500 183 Condominiums - 218 - Property resales 40 40 0 Started sales of the sixth condominium in the Nagoya Region Address: 5-chome, Sakae, Naka-ku, Nagoya Access: 4-minute walk from Yabacho Station on the Meijo Line (subway) Structure and size: Reinforced concrete building with 11 stories above ground Total no. of units: 20 Delivery schedule: September 2019
Business activities in the Fukuoka region, where there is potential for continued high growth, are planned to be implemented in FY 2019. Same as in the Nagoya region, business portfolios are single-family homes, condominiums, and property resales. No. of households and net migration in Fukuoka City Household income and individual income of residents of Fukuoka City thousand people 15 0 7 Households / Right Net migration / Left thousand households 9 793 800 thousand yen 8,000 7,000 6,000 5,000 Household income (nation wide) Individual income (nation wide) Household income (Kyushu region) Individual income (Fukuoka city) 6,406 6,055 433 4,000 3,000 3,449 3,324-15 1985 1990 1995 2000 2005 2010 2015 Source: Report on Internal Migration in Japan based on Basic Resident Register published by the Ministry of Internal Affairs and Communications 300 2,000 2000 2005 2010 2015 Source: Annualized based on the actual monthly income of households (working families) with two-or-more person household, obtained from the report "Family Income and Expenditure Survey," the Ministry of Internal Affairs and Communications. Calculated by diving taxable income by the number of taxpayers, based on data obtained from the report "Survey of Taxation of Municipal Inhabitant Taxes, etc." by the Ministry of Internal Affairs and Communications <Reference> Social structure of Fukuoka City (in comparison with other ordinance-designated cities) Ranking Population growth rate (2010-2015) (thousand people) Population (thousand people) Proportion of people in 20-30 age group (20-30 age group to all age groups) 1 Fukuoka 1,539 5.1% Yokohama 3,725 Tokyo Ku-area 28.2% Tokyo Ku-area 2 Tokyo Ku-area 9,273 3.7% Osaka 2,691 Kawasaki 28.0% Fukuoka 3 Kawasaki 1,475 3.5% Nagoya 2,296 Fukuoka 26.9% Kyoto 4 Sendai 1,082 3.5% Sapporo 1,952 Osaka 25.6% Osaka Ranking of potential-growth cities (general evaluation) 5 Saitama 1,264 3.4% Fukuoka 1,539 Sendai 24.9% Kagoshima *Not an ordinance-designated city Reference Whole nation 127,095 0.8% Tokyo Ku-area 9,273 Average 22.0% Source 2010-2015 Population Census Statistics Bureau 2015 Population Census Statistics Bureau 2015 Population Census Statistics Bureau Fukuoka city is ranked first in the Potential Group 2017 Potential-growth cities Nomura Research Institute
Updated on November 2018
600 Total revenue 590.0 Others Property resales 510.0 80 400 200 Condominums Single-family homes related Ordinary Income Profit attributable to owners of parent 179.3 247.2 304.6 390.7 51.5 37 61 42.5 60 40 96.9 112.1 20 ( billion) FY2013 FY2014 FY2015 FY2016 FY2019 forecast Single-family homes related 61.1 69.2 116.7 155.0 187.3 218.5 340.0 403.0 Condominiums 27.1 25.7 20.0 19.0 26.4 49.3 57.0 60.0 Property resales 6.9 16.5 41.7 72.8 88.9 107.4 87.0 87.0 Others 1.7 0.6 0.7 0.4 1.8 15.4 26.0 40.0 Total revenue 96.9 112.1 179.3 247.2 304.6 390.7 510.0 590.0 Ordinary income 9.1 12.8 20.2 29.1 36.1 46.0 51.5 61.0 FY2020 plan 0 Profit attributable to owners of parent 5.6 7.7 12.6 18.7 24.7 31.9 37.0 42.5 Note: The Single-Family Homes Related Business includes Brokerage, Open House Architect, and adjustment amounts. The Earnings Plan has been prepared on the basis of the existing businesses, excluding overseas business, new business, M&A, etc. 2013.9-2017.9 Revenue CAGR:33.1% 2017.9-2020.9 Revenue CAGR:24.6%
Sustaining high capital efficiency (ROE: 30% level) Maintaining strong financial condition to ensure the safety of financial aspects (Equity ratio: 30% or above) (billion yen) (%) 300 ROE: 30% level 250 38.4% Equity ratio 36.8% Equity ratio: 30% or above 40 200 150 100 25.2% ROE 23.2% 29.2% 29.9% 33.7% 31.1% 33.8% 32.3% 82.9 33.6% 106.1 27.0% * Equity ration that reflect the share exchange executed on October 1, 2018 : 28.8% 20 50 29.9 37.0 47.4 63.7 Owned capital 0 FY2013 FY2014 FY2015 FY2016 FY2019 plan FY2020 plan 0
We plan to gradually increase the dividend payout ratio, targeting 20% in the fiscal year ending September 30, 2020. We will flexibly buy back shares with comprehensive consideration given to financial strength, business performance, stock prices, etc. (yen) (%) 200 17.2% 18.5% 20.0% 20 14.5% 13.5% 15.1% 14.7% 100 Payout ratio 98.00 121.00 10 8.7% 12.50 20.00 30.00 50.00 65.00 0 FY2013 FY2014 FY2015 FY2016 FY2019 (plan) FY2020 (plan) 0 <Assumptions made in calculating indicator per share> 1. The stock splits (1,000-for-one stock split on June 28, 2013 and two-for-one stock split on July 1, 2015) are assumed to have been executed in the beginning of the fiscal year ended September 30, 2013. 2. Figures in and after the fiscal year ending September 30, 2019 are calculated based on the number of shares (total number of shares issued treasury shares) as of September 30, 2018.
We purchased treasury stock to enable us to execute a flexible capital policy in response to changes in the business environment. We provide a shareholder benefit program to foster an understanding of the Open House Group s businesses. Purchase of treasury stock Purchase period September 11, 2018 to September 20, 2018 Aggregate number of shares purchased Aggregate value of shares purchased 561,800 shares (Upper limit: 600,000 shares) (1.01% of the total issued shares (excluding treasury stock)) 2,999 million (Upper limit: 30 million yen) (For reference) The Company disposed of 1,357,909 shares of its treasury stock to be appropriated for a share exchange with Hawk One s shareholders on October 1, 2018. The number of treasury stock held by the Company as of October 31, 2018 is 877,171 shares. Details of benefits Less than 3 years continuous holding 3 or more years continuous holding Benefits when purchasing homes brokered by the company or sold by the group 100,000 yen cash back 300,000 yen cash back Quo Card 3000-yen card 5000-yen card Eligible shareholders: Those owning one or more trading units (100 shares) of company stock as recorded on the shareholders register as of September 30 of each year Continued holding represents shareholders who have retained one unit (100 shares) or more of the Company s common shares for not less than 3 years, with the initial day of reckoning of September 30, 2015.
Disclaimer This document contains forward-looking statements concerning future business performance. These statements include company forecasts based on information available at the time of publication and involve potential risks and uncertainties. They do not constitute a guarantee of future results. The information provided herein is subject to change without notice; no guarantees are provided with regard to the accuracy or reliability of such information. This document is provided for informational purposes only. It does not constitute a solicitation to invest.